Riau demands part of gas revenues from Natuna islands

The provincial administration of Riau has demanded part of revenues to be raised from the sales of gas from three offshore gas fields in Natuna islands, which is part of the province, Bisnis Indonesia reported on Thursday.

Riau Governor Saleh Djasit said in Pekanbaru on Thursday that the provincial administration could not accept the central government?s decision to exclude the offshore gas fields in Natuna islands from the inter-governmental financial balance law, which allows a province to share the revenues raised from oil and gas production in the province.

?The provincial administration (Riau) could not just accept the decision. We will continue to fight for the share in the gas revenues from Natuna islands,? he was quoted as saying. He added that the local government had formed a team which would negotiate the province?s demand over the gas revenues from gas fields from the island.

There are three oil gas fields offshore Natuna islands at present, and are operated by US Oil and gas firm Conoco Inc., Premier Oil and Gulf Indonesia Resource. The natural gas will be sold to Malaysia and Singapore through an undersea pipeline network under a long-term contract agreement. The gas supply is expected to start in 2003.

According to the government?s ruling, all of the production of offshore oil and gas fields located 12 miles from the beach are fully under the control of the central government. But Governor Saleh said the Riau people could not accept such a ruling, describing the policy as absurd. (*)